Chartwell’s 323-Unit Retirement Home in Mississauga Set To Become Apartments
Chartwell’s 323-Unit Retirement Home in Mississauga Set To Become Apartments
Retirement Home Giant To Sell Property to Developer With Plans To Convert It Into Apartment Units
Canadian retirement home leader Chartwell plans to sell a large Ontario operation located near its head office in Mississauga that the buyer plans to convert into apartments, the company announced in its most recent quarterly earnings report.
Chartwell resolved to close its nine-floor, 323-unit Heritage Glen facility at the end of July. The property did not attract the same level of popularity as most of Chartwell’s operations, attaining under 60% occupancy over the last few years, according to a statement.
“The property wasn’t well-suited to continue as a retirement home and when you look at the vacancy rate in the region of retirement homes versus multi-res, it made a lot of sense for everyone for it to be repurposed as multi-residential,” said Jonathan Boulakia, Chartwell’s chief investment officer, on the earnings call. The complex is located about a 15-minute drive southwest of Chartwell’s head office in Mississauga, Ontario.
Chartwell plans to sell the property to an undisclosed developer with plans to convert it into apartment units, a strategy that has become increasingly common among Canadian retirement homes as profit margins have declined while apartment rents have soared. Details of the pending deal have not been finalized, Boulakia said on the call.
In a second deal, Chartwell said it will sell its 224-bed Ballycliffe project at 70 Station St. in Ajax, Ontario, for $64.5 million. The sale is part of a portfolio of 16 long-term care homes Chartwell sold to Axium and AgeCare Health Services in September for $442.2 million. The deal saw Chartwell part with 2,418 beds at the time while committing to sell the Ballycliffe property at a later date.
Chartwell is one of Canada’s largest retirement home chains with 175 properties in four provinces overseeing 25,000 residents. Chartwell is completing a significant portfolio split with U.S.-based Welltower that is expected to be made final sometime in the second quarter. Chartwell’s split with Welltower will see it close out 23 shared operations, while Chartwell emerges with 16 properties from the partnership, as well as a payment of $97.2 million.
Chartwell has a partnership agreement with Quebec-based builder Batimo that obliges Chartwell to purchase a Batimo-built property when it attains a certain occupancy level. The deal will result in Chartwell buying up one more retirement home facility that has yet to be identified. Chartwell also plans to dispose of another non-core property, it revealed during the call.
Many Canadian retirement home operations have hit rough waters in recent times as labour costs and other expenses have risen fast. Chartwell announced a $2 million loss in the first quarter of 2024, but the loss is far less dire than the $9.3 million hit it took in the same quarter one year earlier.
Chartwell credited lower labour expenses for the improved results, noting that management reduced staffing agency costs by 60% and also had success with a new bonus recruitment referral program, while also actively recruiting retired nurses and recent graduates and immigrants. The firm also credited a new electronic health record system for helping to lower its operating costs.
Source CoStar. Click here to read a full story.
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